Pradhan Mantri Fasal Bima Yojana Current Affairs - 2019
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The operational guidelines of the Pradhan Mantri Fasal Bima Yojana (PMFBY) prescribe the timeline of two months of completion of Crop Cutting Experiments/harvesting period for settlement of claims by insurance companies. This timeline is subjected to conditions like timely release of subsidy and yield data to the insurance companies.
Reasons for the delay in settlement of claims
One of the biggest drawbacks in the PMFBY was the delayed settlements of claims. The main reasons for the delay were:
- Delayed transmission to yield data.
- Dispute raised by Insurance Companies on yield data.
- Reconciliation of individual farmer data on the portal by bank branches.
- Late release of their share in premium subsidy by some States.
- NEFT related issues.
Revised guidelines to overcome the delays
The government has comprehensively revised the Operational Guidelines of the PMFBY scheme to ensure better transparency, accountability and timely payment of claims to the farmers. The following provisions have been made in the operational guidelines:
- Provision of 12% interest rate per annum to be paid by the Insurance Company to farmers for any delay in settlement of claims beyond 10 days of prescribed cut off date for payment of claims.
- State Governments are required to pay 12% interest rate for delay in the release of the State share of Subsidy beyond three months of prescribed cut off date/submission of requisition by Insurance Companies.
Pradhan Mantri Fasal Bima Yojana (PMFBY)
Pradhan Mantri Fasal Bima Yojana (PMFBY) is the government-sponsored crop insurance scheme that integrates multiple stakeholders on a single platform. It was supposed to provide a breakthrough by enhancing the coverage of the crop insurance and protect the farmers from the vagaries of the monsoon.
Under the scheme, there is a uniform premium of 2% to be paid by farmers for all Kharif crops, 1.5% for all Rabi crops and 5% in case of annual commercial and horticultural crops. The balance premium would be paid by the government. The scheme is being implemented in an area-based approach.
Government has appointed senior bureaucrat Ashish Kumar Bhutani as Chief Executive Officer (CEO) of Pradhan Mantri Fasal Bima Yojana (PMFBY). He has been appointed to post till May 2020. He is IAS officer (1992 batch) of Assam-Meghalaya cadre.
Pradhan Mantri Fasal Bima Yojana (PMFBY)
It is farmers’ welfare scheme launched in 2016 to ensure faster insurance services or reliefs to farmers. It was formulated in line with One Nation–One Scheme theme by replacing earlier two schemes National Agricultural Insurance Scheme (MNAIS) and Modified National Agricultural Insurance Scheme (MNAIS) by incorporating their best features and removing their inherent drawbacks (shortcomings). It aims to reduce the premium burden on farmers and ensure early settlement of crop assurance claim for the full insured sum.
Objectives: Provide insurance coverage and financial support to farmers in event of natural calamities, pests & diseases. Stabilise income of farmers to ensure their continuance in farming. Ensure flow of credit to the agriculture sector. Encourage farmers to adopt innovative and modern agricultural practices.
Beneficiaries: All farmers growing notified crops in notified area during season who have insurable interest in crop are eligible under this scheme. It also provides insurance benefits to Landless labourers. It is compulsory for loanee farmers availing crop loans for notified crops in notified areas and voluntary for non-loanee farmers.
Key Features of Scheme
Under this scheme, farmers need to pay uniform premium of only 2% for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, farmers have to pay premium of only 5%. The premium rates to be paid by farmers are very low and balance premium will be paid by Government. Moreover, there is no upper limit on Government subsidy, so farmers will get claim against full sum insured without any reduction.
It covers yield losses due to non-preventable risks, such as natural fire and lightning, storm, stailstorm, cyclone, typhoon, tempest, hurricane, tornado. It also covers risks due to flood, inundation and landslide, drought, dry spells, pests and diseases. It also covers post-harvest losses are also covered.
Udder this scheme, it mandatory for use of technology such as smart phones, drones etc to capture and upload data of crop cutting to reduce delays in claim payment to farmers. Remote sensing will be also used to reduce number of crop cutting experiments. The scheme is implemented on Area Approach basis. In this case, defined area (i.e. unit area of insurance) is village or above it can be geo-mapped and geo-fenced region having homogenous risk profile for notified crop.